Loss leaders: March 2009 Archives

It was last sold right when it was built:

Last sale and tax info

Sold 09/14/2004: $858,500

2008 Property Tax: $11,934

The pricing strategy appears to be something along the lines of "We're not losing money on this! Let's get a pair of agents who will share a 4% commission and we can break even."

It looks great if you like huge new McMansions that look the same on tiny lots with nice, straight new sidewalks and minuscule green spaces whose personality gets brutally manicured out of them on a regular basis.

Update 8/30/09: Sold for $852,000, less than its 2004 price.

Combine a busy schedule with what looks like a Spring-bounce-ready market full of new listings, and you get a much abbreviated, but hopefully still informative, threefer post. The "appreciation" calculations are based on 4.5% yearly adjustment for inflation, 6% agent commissions, and 2009 sale at full list price (yes, I know, a likely story).

Today's gravitational cutlery includes the specimens below:

311 Centre Court, 2-bedroom, 2-bathroom townhouse, 1,720 sqft, $579,000 ($337 / sqft)

2009: $579,000
2004: $570,000
Appreciation*: -$166,000

Speaking of fake wealth destruction, today's little Victorian at 1009 Central is up there with the best of them.

4 bedrooms, 2 bathrooms (+ 2 non-permitted bathrooms), 1,365 sqft, 5,440-sqft lot, MLS(r) #40401382, $499,000

Beautifully maintained Victorian [...] lot of charm. Hardwood floors, updated kitchen [...] 2 bathrooms without permit [...] no garage but huge driveway for plenty of parking.

The pointy roof looks odd to me--I could be convinced it's original to the 1891 building, but something tells me it was added later on, based on countless other little Victorian cottages sprinkled all over the island.

The listing claims this is a two-story home, but it looks like a one-floor, high-basement cottage with a finished (or not) basement. There's what looks like a permit ready to go to convert the basement back to storage, so I'm not sure whether all four of the bedrooms (not to mention the two stowaway bathrooms) would stay:

Case / Application / Permit Number			CB07-1243
Type / Classification			Building
			Combination Building Permit
			Residential / Over the Counter
Address			1009 CENTRAL AVE ALAMEDA, CA 94501
Parcel Number			073-0392-015-00
File Date			11/16/2007
Status			B_OTC -  Ready to Issue
Status Date			2/15/2008
Valuation			$0.00
Fees			$7,107.35
Payments			$3,553.50
Balance			$3,553.85
Description			CODE ENF:X04-0395 & X05-0222(MM)CONVERT BASEMENT BACK TO STORAGE AREA BY CAPPING OFF BATHROOMS & KITCHEN -PLBG/MECH/ELE FROM ORIGINAL SOURCE & CONVERT ATTIC BACK TO STORAGE AREA (BLDG/PLBG/MECH/ELE)

I didn't find a permit for foundation work; one other recent permit indicates some sheetrock had to be removed in the basement to ascertain whether basement walls were load-bearing and bring the basement up to code. All of this suggests to me the foundation might need some work, but again I'm happy to be corrected if anyone has credible evidence to the contrary (one wishes more homes would make that determination as easy as 2323 Buena Vista).

Now, what about that phantom wealth destruction?

Property History for 1009 CENTRAL Ave

Date	Event	Price
Mar 21, 2009	Listed	$499,000
Aug 04, 2005	Sold	$700,000

That's about 29% off its 2005 sale price. Of course, I expect some agent to chime in triumphantly when it sells quickly after multiple bids over asking. They can cling to their denial of the inevitable return to normalcy that's hitting the Bay Area for as long as they want. 

Update 9/19/09: Relisted for $460,750.

Sometimes I wonder if the Treasury is printing money to make up for the massive wealth destruction occurring all over the country as the excesses of the housing bubble are being wrung out of the system. Of course, none of the money being lost was ever real money, and it's painfully clear nobody likes what the Treasury is doing. Today's McMansion in the West end is a subprime example of foresight and excellent money management:

4 bedrooms, 2 1/2 bathrooms, 2,925 sqft, 3,760-sqft lot, MLS(r) #80914276, $690,000 $790,000

Award winning design [...] shows like model. Over $15,000 in kitchen upgrades and $22,000 in countertop and flooring upgrade. Beautiful Bamboo flooring, [...] Stainless Steel appliances, Thermador built-in refrigerator, double oven, caesar stone counters [...] Won't last long!

They're so sure it "[w]on't last long" they raised the price by $100,000 the day it was listed. Or maybe the initial list price was a Freudian typo.

Property History for 310 LINA Ave

Date	Event	Price	Source
Mar 20, 2009	Price Changed	$790,000	MLSListings #80914276
Mar 20, 2009	Listed	$690,000	MLSListings #80914276
Nov 28, 2006	Sold	$1,088,500	Public Records

My favorite part, though, is the lovely bath the owners are taking on this property: $298,500 (27%) in 30 months or so--that's about $10,000 per month going "poof" since they purchased the property. Assuming they've been making regular payments since they moved in, this is roughly the same as paying $15,000-$18,000 a month in rent, with the added bonus of a couple of blown FICO scores and (most likely) a stress-related illness or two. But we know full well homeownership is the best way to build wealth.

At $270 / sqft, it's still too much, of course, especially considering how small the lot is. And $790,000 is a lot of money, regardless of how big the house might be. Now that lending has returned to reasonable standards, anyone buying this property would have to have between $80,000 and $160,000 in cash and $200,000 or more stable yearly income. Considering how well the economy is doing in California, I'm sure the sellers will find dozens of qualified buyers in no time flat.

To all the Alameda real estate agents who say things like...

the prices in Alameda have always held their values for the most part! We are again seeing some multiple offers on properties!

maybe it's time you stopped lying through your teeth making provably false statements being ignorant idiots working.

(Thanks to Sam Bezi for this post's title) 
 
Update 4/10/09: Also known in the local MLS(r) as #40404344.

It appears that spamming Craigslist with borderline bait-and-switch ads and even the old "Taking multiple offers on Saturday from 1 to 4" trick didn't work (imagine that!), so 601 Fortress Isle is back on the market.

Again.

It's now on the MLS(r) as #40401150 (no Redfin link yet), listed for $722,000, with no description. The same broker that was carpet-bombing Craigslist with his idiot agents who think Alameda has an ocean view and a lake still has the listing.

Remember 1201 Central, the non-luxurious luxury home that comes with all its appliances, last seen on the market last summer?

It's back as MLS(r) #40400498. The property description is essentially unchanged.

Gorgeous 3 Bed 3 Bath Home! Over 1700 sq ft. Corner location on tree lined Central Avenue. Stone tiled kitchen nook. All appliances stay - washe, dryer, stove, refrig all less than 2 years old. Luxerious His & Hers walk-in closets in upstairs master bedroom - Luxury Alameda Living

The owners tried $689,000, then $629,000, then took the property off the market. It came back today at $599,000, which is substantially less than they paid for it in 2003, especially if you include 6% commission. It really makes me wonder if they grossly overpaid in 2003, or if they let the property go to pot, or both.

Update 3/18/09: This is indeed a short sale.

A side effect of completing a sold-out housing development at the top of a housing bubble is that, when the market turns sour, an entire subdivision is underwater all at once. This week's McMansionette at 310 Bryant Ave has the following specs:

4 bedrooms, 2 1/2 bathrooms, 2,925 sqft, 4,013-sqft lot, MLS(r) #40400068, $799,000

Master developmnt [...] W/ Newer elementary Sch. Spacious Private sunny courtyard & backyard w/ morning & afternoon sun. [...] Extra large master suite. [...] Formal dining rm w/ spacious kitchen & lots of cabinets. Big family Rm. Anderson window.

The sale history might be a lesson for future buyers:

Property History for 310 BRYANT Ave

Date	Event	Price
Mar 14, 2009	Listed	$799,000
Aug 19, 2005	Sold	$861,000

But we know all too well home buyers aren't exactly the most prudent type, so somebody will probably think this is a great bargain at $273 / sqft and buy it near list price in the worst down market in US history. Oh well.

 

I know a lot of buyers have been chomping at the bit for another chance to purchase 409 Shell Gate Road, which was on the market last year. All that pent-up demand, free-flowing credit and strong job market, combined with a realization that now is a great time to buy real estate and invest in your future, almost guarantee it's going to be gone by Sunday.

Well, your wish has come true, and you're getting a second chance! 409 Shell Gate Road is now back on the market, known as MLS(r) #40399644, and listed for a paltry $525,000, or only $349 / sqft for a unique gem of mid-1960s architectural flair.

Please be courteous and try not trample each other as you rush to drop off your signed offer of 15% over asking with 40% down and 815 FICO.

(excuse me)

You may remember that this ugly run-of-the-mill rancher was advertised as follows (emphasis added):

Hawaii in alameda? This lovely home is a strolling distance to the shore, schools, shops and rest-aurants. It's a spacious 3bd/2baths/2cgarage cozy home. Features central heating, romantic fireplace in livingrm, move in condition. Hurry this won't last.

I hope words are nutritious, because that's all a lot of Realtors(tm) have to eat these days.

You may remember the "painted lady" Victorian on Morton that was bragging about its "unheard-of" price (and then its unheard-of price drop). It disappeared without a sale last last year, and with good reason--it was overimproved (if you can say what looked like a $75,000 tricked-out kitchen is "improved") and overpriced.

I heard through the grapevine the owners had bought a new house before selling the Morton property, and were in a bit of a bind.

Well, it's back (MLS(r) #40399138), for the even more unheard-of price of $975,000.

If I may quote myself:

Assuming an appreciation that matches historic trends (i.e. around 5%), today's price should be about $830,000.

It was listed for $1,250,000 at the time, which means it's down about 65% of where it needs to be.

Now consider that Lehman Brothers and relatively easy credit were still around then. The rhetorical question at the top of my original post now seems to be answering itself:

Why can't this house come on the market in a year or two, for $500K less?

Update 8/25/09: Still on the market with a really idiotic price drop from $975,000 to $949,999. Not only is "$949,999" a truly meaningless discount from $950,000, it also shuts out all the buyers who start looking at $950,000 using various real estate Web sites. Well done, genius(es).

Update 8/27/09: Still on the market for any one of three prices.

Update 11/13/09: Pending.

As promised earlier today, here's a short summary of goings-on at 1616 Cornell Drive, a pointy English Tudor on a corner lot in the East End with the following vitals:

3 bedrooms, 1 bathroom, 1,487 sqft, 4,040-sqft lot, MLS(r) #40398284, $749,500

[...] 1929 English Tudor is in the desirable Fernside neighborhood, and walking distance to top-rated schools. [...] fine architectural details, [...] updated kitchen, lots of storage, built-in cabinetry, a wood-burning fireplace [...] much more.

Nothing terribly interesting about this property other than its excessive price ($504 / sqft), whose only justification is the property's previous sale price under three years ago:

Property History for 1616 CORNELL Dr

Date	Event	Price
Mar 05, 2009	Listed	$749,500
Nov 17, 2006	Sold	$740,000

Note to buyers: nothing good comes out of paying too much for your house.

Update 4/9/09: Amusingly, the price was increased to $769,500.

Update 10/4/09: Finally a teeny tiny price drop, to $720,000, after about 7 months on the market. "New low price" my foot. ZipRealty has this listing tagged as a short sale (no surprise there).